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Revisiting the Returns to Higher Education: Heterogeneity by Cognitive and Non-Cognitive Abilities

Author

Listed:
  • Oliver Cassagneau-Francis

    (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique)

Abstract
Recent work has highlighted the significant variation in returns to higher education across individuals. We develop a novel methodology-exploiting recent advances in the identification of mixture models-which groups individuals according to their prior ability and estimates the wage returns to a university degree by group. We prove the non-parametric identification of our model. Applying our method to data from a UK cohort study, our findings reflect recent evidence that skills and ability are multidimensional. Our flexible model allows the returns to university to vary across the (multi-dimensional) ability distribution, a flexibility missing from commonly used additive models, but which we show is empirically important. The returns to higher education are 3-4 times larger than the returns to prior cognitive and non-cognitive abilities. Returns are generally increasing in ability for both men and women, but vary non-monotonically across the ability distribution.

Suggested Citation

  • Oliver Cassagneau-Francis, 2022. "Revisiting the Returns to Higher Education: Heterogeneity by Cognitive and Non-Cognitive Abilities," Working Papers hal-04067399, HAL.
    • Handle: RePEc:hal:wpaper:hal-04067399
    Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-04067399
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    References listed on IDEAS

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    Keywords

    Mixture models; Distributions; Treatment effects; Higher education; Wages; Human capital; Cognitive and non-cognitive abilities;
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